O'Malley to restore utilities control

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ANNAPOLIS — Gov. Martin O'Malley yesterday said he plans to do all he can to restore state regulatory power over utilities, a day after Constellation Energy announced a lawsuit to recoup $386 million it says Maryland shouldn't have forced them to give customers.

"I also want to add that we will spare no expense when it comes to investing in whatever additional legal help that we need, or whatever professional experts and consultants we need, or expert witnesses in order to stand up for the best interests for the people of our state," Mr. O'Malley said.

The governor, who reconfigured the Public Service Commission (PSC) shortly after he took office, criticized the previous PSC for not being committed to keeping prices down.

"But there's a new commitment now, and that commitment is to face this challenge dead-on and to do what we must in order to secure more affordable and stable energy for Maryland in the foreseeable future," said Mr. O'Malley, a Democrat.

Constellation announced Wednesday it plans to sue the state in federal court to get back $386 million in credits customers received to soften the blow of a 72 percent rate increase. The credits were approved by lawmakers in a June 2006 General Assembly special session to address rising costs because of Maryland's decision to deregulate the electricity market in 1999.

Constellation, which is the parent company of Baltimore Gas and Electric Co. (BGE), has charged that a recent report by state regulators on the impact of deregulation on customers is full of errors. The company also said the report is indicative of an unfairly hostile regulatory climate, throwing the energy marketplace in Maryland into uncertainty.

Constellation has even floated the idea of building a new nuclear reactor in New York instead of Maryland as previously planned.

The PSC's report found that customers paid $975 million for costs to BGE plants and $491 million to decommission nuclear power plants at Calvert Cliffs, while only receiving $316 million in rate relief between 1999 and 2006, for a net cost of $1.15 billion. The company contends the PSC is using hindsight in an effort to undo the agreement.

Rob Gould, a spokesman for Constellation, said the company's lawsuit is about more than the $386 million.

"We are preserving our rights, but it's as much about the sanctity of a contract and knowing that when signatures are put on an agreement that that agreement will be honored," Mr. Gould said.

But Mr. O'Malley said he was planning to defend residents "when companies like Constellation sue ratepayers to try to shift another $385 million on their backs on the same day that they report record profits." Mr. O'Malley was referring to the amount of the company's lawsuit, which Constellation puts at $386 million.